Thanks for the insider perspective. I'm curious - what causes such a dramatic change in refund amount after a rejection? Is it usually errors in the original filing or something else? And what should I have asked for specifically to prevent the huge price jump?

Dramatic refund changes after rejection usually happen when the preparer has to correct information that was entered incorrectly the first time. Common examples include incorrect filing status, missing income that the IRS already has on record (like a forgotten W-2 or 1099), or incorrectly claiming credits you don't qualify for. When these corrections happen, tax liability can shift dramatically. To prevent price jumps, always ask for a detailed price list before starting. Request a written breakdown of exactly what forms and schedules are included in the quoted price and what will trigger additional charges. Some offices charge per form rather than a flat fee, so things like reporting cryptocurrency transactions, self-employment income, or education credits can each add $50+ to your bill without warning. Get the pricing structure in writing and ask them to notify you before preparing any forms that would increase your originally quoted price.

This is absolutely correct. I work at a different tax firm and we CANNOT submit without a signed 8879 for each filing. It's a huge compliance issue and could get them in real trouble with the IRS. The practitioner risks losing their filing privileges.

Thanks for mentioning the QBI deduction! I hadn't even thought about that possibility. The project was definitely a one-time thing where I was basically a research subject/participant for about 3 months. I didn't have any real business expenses except maybe using my home internet a bit more than usual for uploading responses and attending a few zoom sessions. Based on everyone's advice, I'm leaning toward filing it as "Other Income" since I wasn't running a business. Does that seem right for my situation?

Based on what you've described, classifying it as "Other Income" on Schedule 1 rather than self-employment income on Schedule C seems appropriate. The key factors are: it was a one-time project, you were more of a participant/subject than a service provider, and you didn't have the intention of creating an ongoing business activity. For future reference, keep documentation about the nature of the project in case there are any questions. The university likely issued a 1099-NEC simply because that's the form they use for any non-employee payment, but that doesn't automatically make you self-employed for tax purposes. The substance of the relationship matters more than the form used to report it.

FreeTaxUSA actually handled my research stipend correctly. You need to go to the Income section, select "Miscellaneous Income" and then choose "Other Income not reported on W-2/1099" instead of selecting the 1099-NEC option. Then you can manually enter the payer info and amount from your 1099-NEC. This puts it on Schedule 1 as Other Income rather than Schedule C.

I wasn't taking classes, just working those part-time jobs. But this is really good to know! I do have a friend in a similar situation who was actually in school. I'll pass this info along to her. Do you remember which forms specifically you needed to file for past years?

You'll need to file Form 1040 for each year you're filing late. You can download these from the IRS website - make sure you get the correct form for each specific tax year (the forms change slightly year to year). If you're claiming education credits, you'll also need Form 8863. For W-2 income, it's pretty straightforward. Each year's return needs to be mailed separately in its own envelope. If you don't have your old W-2s, you can request wage transcripts from the IRS for free using Form 4506-T or through your online IRS account. Most tax software can also help with prior year returns, though you'll still need to print and mail them.

Yes! This happened to my roommate too. He didn't file for 2022 because he only made about $9,000 that year and thought he didn't need to. Turns out his employer had reported more withholding than was actually taken out, so the IRS system flagged it and sent him a notice. He ended up having to sort out the incorrect W-2 AND file the return.

If I do go to a CPA, what documents should I bring with me? I want to be prepared so I don't have to keep going back with more paperwork.

Bring the deed showing when you were added to the title, the closing documents from the sale, any documentation showing improvements made to the home that might affect basis, and anything showing the original purchase price when your father bought it. For the retirement accounts, bring all 1099-R forms, statements showing the withdrawals and deposits, and documentation from both the old and new retirement plan administrators. Also bring your last year's tax return and any correspondence you've had with the IRS. If you have documentation of any hardship that led to the withdrawals, that could be helpful too as it might qualify you for penalty exceptions.

Do they also need to worry about the Section 121 exclusion for primary residence? If they lived in the house for 2 of the last 5 years, couldn't they exclude some of the gain?

Does putting a rental property in an LLC actually save on taxes though? I thought LLCs are pass-through entities so the tax treatment is the same as individual ownership? Also doesn't it make the mortgage situation more complicated?

You're right that a single-member LLC is typically a pass-through entity and doesn't change the tax treatment by itself. I should have been more clear. The tax savings come from strategies you can implement once you have the proper structure in place, not just from having an LLC. The real benefits come when you combine the LLC with proper tax planning like implementing a management company structure or potentially electing S-corp taxation for your activities depending on your situation. And yes, transferring mortgaged properties into an LLC can trigger due-on-sale clauses in some cases, so that's exactly why I recommended consulting with both tax and legal professionals before making any moves.

What app do you use for storing receipts? I've been trying to find a good one that will organize by property and expense type.